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3.6.2 Severe Injury Adjustment

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The SIA is payable to a current or former ADF member whose final permanent impairment rating, related to a specified SRCA injury or disease is determined under section 24 of the SRCA to be no less than 80%. The exact criteria for the injury or disease to be considered for SIA are:

An injury for the purposes of the SRC Act, affecting the brain or spinal cord of a person. The injury must result in quadriplegia, paraplegia, hemiplegia, an organic brain syndrome, chronic blindness or a condition of similar effect.

 

The severe injury must be suffered on or after 10 June 1997 but before 1 July 2004, and be an injury in relation to service of which SRCA compensation is payable. However, for an injury that is a disease for the purposes of the SRCA, the requirement to occur before 1 July 2004 does not apply (i.e. diseases that manifest after 1 July 2004 that relate to a period of service prior to 1 July 2004 can still be considered for the SIA).

 

The amount of the SIA is calculated using the formula found in Defence Determination 2005/15 (as amended):
 

The basic amount of SIA in relation to a member is A – B where:

 

A

is the total of the maximum amount of permanent impairment compensation payable under the SRCA, plus $68,063.38 (indexed).    

 

B

is the total amount of SRCA compensation payable (or that would be payable but for a request under section 43 of the SRCA or an election under section 45 of that Act) to the member in respect of the injury.

     

 

The 'total of the maximum amount of permanent impairment compensation payable under the SRC Act' is the total of the maximum under sections 24 and 27. This allows for increases in the maximum amount of PI compensation paid.

 

The SIA is increased for each dependent child.    

It is important to note that the required 80 per cent whole person impairment for SIA purposes must result from the effects of a single injury. Even if an injured employee is considered to suffer from 80 per cent or more WPI due to a number of compensable injuries, the SIA is not payable unless all of the effects of one injury alone are considered to result in the required level of 80 per cent WPI.

 

In those cases where a person has suffered an injury which is not listed above but which is considered to be of 'similar effect', Rehabilitation and Entitlements Policy should be consulted before making a payment. In considering which conditions can be classed as being of 'similar effect', delegates should keep in mind the original intention of the SIA:

Injuries that may have similar effect are those that result in incomplete paraplegia or quadriplegia, hemiparesis, a significant neurological loss that affects speech and/or vision or amputations. It is perhaps best that a rigid definition be avoided for these circumstances.  Such an approach would enable a member of the ADF who contracts viral encephalitis while on exercise, and as a result, suffers severe neurological damage to be covered under these arrangements.

The severe injuries of the kind that occurred in the Black Hawk crash would be included. However, diseases or conditions that may attract a level of impairment of a high order, from skin disorders to cancers, would not normally be included.

(Inquiry into Military Compensation Arrangements for the Australian Defence Force,

Department of Defence, 1997, p. 38)

 

The SIA is payable even if the injured employee chooses not to accept the SRCA lump sum. This could occur, for example, if the person prefers to take a VEA pension or if an election not to take the lump sum is made under Section 45 of the SRCA (however, see below for implications of common law damages being awarded). In these circumstances, the permanent impairment assessment is still undertaken and the SIA is calculated as normal with the 'B' amount being the amount of SRCA compensation that would have been paid.

 

It is possible to pay an interim SIA if an interim payment has been made under Section 25 of the SRCA and the delegate is satisfied that the WPI will ultimately be at least 80 per cent (and the WPI rating results from a single injury of the kind previously specified).

 

The SIA to be paid as an interim is calculated as it would be for a person receiving the maximum amount of PI compensation available under the SRCA for their accepted condition. That is:

 

A – B where:

 

A

is the total of the maximum amount of permanent impairment compensation payable under the SRCA, plus $68,063.38 (indexed).     

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Compensation & Support Reference Library - Statutory Rates

 

B

is the maximum total amount of SRCA compensation payable (or that would be payable but for a request under section 43 of the SRCA or an election under section 45 of that Act) to the member in respect of the injury.

     

 

 

A

B

= Interim amount of SIA

e.g.

($231,831.94 + $72,068.02)

$231,831.94

= $72,068.02 [rates as at 1/07/2012]

 

What the calculation shows is that because the interim payment is the equivalent of what a person on maximum PI compensation would receive (and always the minimum SIA amount payable), the final SIA calculation will never result in a lower amount and will therefore not result in any overpayment.

 

Once the final assessment of the WPI has been made, the SIA can be re-calculated and reduced by the amount of the interim payment.